When I ran in 2006, I blew the whistle on “unethical” tax sales in Madison County. I narrowly lost that election. And the tax sales got even worse. I raised the same issue in 2010, won, and reformed the tax sale process. Then the FBI began an investigation. The following KMOV Channel 4 video reports on former Treasurer Fred Bathon pleading guilty to federal criminal charges of “rigging” tax sales to benefit his contributors. The losers of this “rigging” were struggling taxpayers in Madison County, who paid many millions of unnecessary penalty interest, fines and fees.
Reformed tax sale process – saving late taxpayers millions of dollars
- Refused money from tax buyers. I refused political contributions from tax buyers. Former Treasurer Fred Bathon took over $150,000 of political contributions from tax buyers from 1998 – 2009. Appointed Treasurer Frank Miles took over $20,000 during 2010.
- Automated software. I began using automated software, which eliminated the possibility of conflicts of interest. Good ethics resulted in millions of dollars of savings for late Madison County taxpayers.
- $2 million savings for struggling taxpayers. The former “rigged” tax sales forced late taxpayers to pay “loan shark” penalty rates of 18%. My Feb 2011 tax sale resulted in penalty rates of under 4%, saving struggling taxpayers over $2 million per year.
- On February 5, 2013, former Treasurer Fred Bathon pleaded guilty to federal criminal charges that he “rigged” tax sales in order to benefit political contributors. It is reported that Bathon could spend between 30 to 41 months in federal prison, and lose his $88,000/year county pension.
Saving taxpayers millions of dollars
- 30% in 30 days. Within my first 30 days in office I set in motion changes to reduce the Treasurer’s budget from $1 million to $700,000/year, saving taxpayers over $300,000/year, closer to $400,000/year, when costs of health insurance, social security and pension costs are considered. I inherited 18 full-time employees. Current employment: 13 full-time employees, with no reduction in services. Total savings to date: over $1 million.
- Saved taxpayers money by refusing to participate in the county pension program. Total savings to date: over $30,000.
- Saved taxpayers over $30,000/year on the mailing over 130,000 tax bills, by eliminating return envelopes and reducing the weight of the tax bill. Total savings to date: over $60,000
Investments – Ethics and Profit
- Profit from Loss. The investment portfolio lost over $3 million during fiscal year 2010, the year prior to my becoming Treasurer. In my first year, investment profits were over $4 million.
- When I was sworn in on Dec 1, 2010, I was shocked to discover that the county investment portfolio of over $100 million had lost over $3 million of value during year ending Nov 30, 2010, because of investing in long-term Fannie Mae and Freddie Mac bonds.
- During the 28 days after the election and before my swearing in, the former Treasurer quickly purchased $36 million of long-term bonds from one Little Rock, Arkansas bond salesman, without competitive bidding.
- The investment portfolio as of Nov 30, 2010 included $41 million of bonds, with maturities of 12 to 15 years, in violation of the Investment Policy, which prohibited investing in maturities beyond 10 years.
- During the 9 years prior to my becoming Treasurer, over $500 million of bonds were purchased from one Little Rock, Arkansas bond salesman, without competitive bidding. A FINRA arbitration claim has been brought against this firm to recover excessive commissions that were charged.
- In May of 2011, the State’s Attorney hired a non-partisan law firm that specializes in securities law, and, per this firm’s advice, the violative bonds were liquidated on June 9 and 10, using 6 competing local brokers.
- Value of investments has increased by $12 million (11%) since Nov 30, 2010, from $105 to $117 million.
- Taxpayer funds are now invested in maturities less than two years, in line with other Illinois counties. The portfolio is now complies with a) Illinois law, and b) best financial practices.
- Local investing. I have doubled the amount of money invested in local banks, and doubled the number of banks where money is deposited. This helps local banks make loans in Madison County, helping local businesses create much needed jobs in Madison County.